Prevas AB

Hello and welcome to today's webcast with Prevas. With us presenting today, we have the CEO Magnus Vilén and CFO Helena Byrström. If you're calling in and would like to ask a question, please press star 9 to raise your hand and star 6 to unmute yourself when you get the word. You can also submit your questions using the form to the right. And with that said, please go ahead with your presentation.

Thank you very much and welcome all to this presentation of the Q4 results for Prevas. This meeting today will follow this agenda. We will start with a short introduction. We will review Preva's financial performance. We will have a market update and finalize this meeting with a Q&A session. Okay, looking into Q4 of 2025, how did Prevas perform? We actually made a quite stable revenue performance. We had a negative organic growth of minus 1.7% and we had a positive growth due to acquisitions of 1.8%. So the net sales were slightly above last year for the quarter. Looking into the profits, we can see that Prevas has increased the profit from 32.6% last year up to 35.1 million SEK in 2025. This equals to an EBITDA margin of 8.1% compared to last year of 7.5%. And what is the underlying reasons for this improvement? One big part is that we for the fifth consecutive quarter improved the EBITDA in Finland from last year 0.1 million SEK up to 3.3 million SEK in 2025. This is one part of the reason for the improvement but also of course it's a result of all the actions that we take in Prevas in order to increase the efficiency. We have made numerous actions in 2025. What we also see in Q4 is that the operating cash flow continues to be strong in Prevas. We deliver a cash flow of 40.6 million SEK, which if you compare it to the EBITDA of 35.1 million SEK, really shows that we have the ability to create a strong cash flow in Prevas. The board is proposing a dividend of 4.0 SEK for 2025. This equals to 73% of the profit of the tax for 2025, which actually is higher than our financial target of 40 to 60% over time. So all in all, I believe that we are doing Q4 taking a good step forward in the progress of Trevas. And then if we look into the year 2025, we can see that Prevas has performed a revenue of 1.6 billion SEK. That equals a growth for the year of 2.5% and the EBITDA of 7.5%. We also see that we continue to have a strong cash flow, so the operative cash flow for the year has also increased up to almost 144 million SEK. In my book, this year shows that Prevas has the ability to navigate in a more difficult market. During this year, we have seen quite tough market conditions and We have really taken a lot of action in order to mitigate and to adapt Prevas and find new opportunities to also to meet when we see reduced demand. So all in all for the year, 2.5% growth and 7.5% of EBITDA. If we zoom out a little bit, we can see on the sales sides that Prevaz is continuing to grow, even though at a slow rate in 2005 due to the conditions that we have been in. But if we zoom out a little bit more, in five years, Prevaz has more than doubled the net sales from 772 million SEK in 2020 up to 1,627,000,000 in 2025. It's more than doubled the size of Prevaz in five years. And of course, our strategy moving forward is to continue to deliver profitable growth. Looking into the EBITDA and EBITDA margins, you can see that on the other side of this slide, we can see that during H2, Q3 and Q4, we have a positive trend. We are actually higher than last year, Q3 and Q4, which of course is very positive. Looking into H2 as a total, we have grown the EBITDA with 10.2% compared to last year. So all in all, I believe we are moving in the right way with Prevas. And with this, I would like you, Helena, to talk a little bit more in detail related to the cash flow and our financial position in Pielas.

Thank you, Magnus. Cash flow from operating activities increased by 7 million SEK to 144 million SEK for the full year. Cash flow from operating activities in Q4 amounts to 41 million SEK. The differences in investment activities and financing activities compared with previous year are mainly explained by the acquisition in Finland in 2024. Cash flow for that period increased both in Q4 and for the full year versus 2024. The overdraft facility of 100 million SEK remained fully unused. Cash at the end of the quarter amounted to 21 million SEK compared to 44 million SEK last year. We do have a strong balance sheet and a solid financial position that will support our continued growth journey. And with that, I hand it over to you again, Magnus.

Thank you, Helena. You were mentioning Finland, and I would like to give you all an update of the progress we have done in Finland in Q4 of 2025. This is, as I said, the fifth quarter in a row with a positive trend in Finland. For this quarter, we actually had 19% organic growth and increased EBITDA from 0.1 up to 3.3 million CX. It's been a tremendous increase. change in Finland. And this is, of course, a consequence of the actions that we have taken. We have reorganized the organization in Finland. We have adapted our workforce slightly. We have also increased the sales focus quite dramatically in Finland. What we see now for the Q3 and Q4 in 2025 is that the mix of the business has also changed. We see a higher share of project business, which impact EBITDA positively. And looking into the future, we can also see that we have larger projects that we will deliver in Q1 and Q2. So I'm positive that we will continue to have a good development in Finland moving into 2026 as well. Looking into the market, it's still competitive. It's still a quite tough market in Finland, although we have some positive signals. But generally speaking, my view is that we still have a very competitive situation in Finland. And then a little bit about the general market update. What we saw in Q4 2025 was more or less a similar market as we have had for the complete year 2025. We have very strong demands in defense sector, in cybersecurity. And outside of that, it's very different because we have some customers with increasing demands, some customers with decreasing demands. So it's been a significant variation in customer-specific demands also in Q4. During the quarter, we have also seen a slowdown in Denmark due to, I would say, mainly the effect of Novo Nordisk that has now reduced with 5,000 employees in Denmark that is affecting the industry. The direct effect for Prevaz is quite small, but indirect effect when it comes out, a lot of engineers in the market, of course, affect us one way or the other. And what are we doing in order to meet this slowdown in Denmark? We have taken actions. We have now decided in Q4 to make a restructuring so that we will adapt our organization to the actual market needs in order to reach good, healthy EBITDA levels as well. We have signed some orders for Q1. The market is not standing still, but it's still quite challenging in Denmark. Looking into Stockholm area, we have seen slightly improved market, actually, where we have seen that the utilization levels for our largest region, Stockholm, has increased at the end of 2025. So that is a positive sign, I would say, that we see a progress in Stockholm. Looking into the industry breakdown, I would like to spend a few seconds related to that as well. What we see here is that defense has increased from 11% up to 16%. Energy has increased from 10% up to 12%. So it's been in those two areas we have seen quite good increases. But we also have areas within the different segments where we have reduced defense. The portion of our sales looking to automotive and transport has gone from eight down to six percent. Steel and minerals has been decreasing as well. And for me, this shows Prevas ability to be agile in the market because we have a good proportion of the different segments and we have the ability to change from areas with low demands to areas with increased demands. So I think this is a very good view of the situation for Prevas. Then I would also like to emphasize that we have a very strong customer retention in Prevas. What do I mean with customer retention is that we have been working with our customers for a long time. Some of our customers we have had and we have been working with since 1985. 28 of the top 30 customers we have in Prevas are recurring. This means that they come back. We had them as a customer in 24. We have them as a customer in 25. And that is the normal way of doing business in Prevas, to have a strong customer retention. We have customers that come back and buy from us year by year by year. And that is, of course, due to the trust and the relationship that we have built with these customers over time. But that is one thing, to keep the customers you have and to grow on present customers. But you also need to have the ability to actually acquire new customers. And in 2025, Priya was acquired over 100 new customers that we have not had relationships before. And that equals an invoicing of 100 million SEK for 2025. And this, for me, proves that we have the ability to be very agile and it's a fantastic platform moving into 2026 with strong customer retention and also many new customers that we can continue to grow also when we move into 2026. Then a few minutes related to the defense industry. In Q4, we actually grew organically with 31% towards the security and defense customers in Prevas. You can see on the graph that we went from more or less like 65 million SEK in turnover in 2020 up to 260 in 2025. So we have a tremendous growth in the security area. And also with these customers, we have been working with them for many, many years, even when it wasn't so hyped in that sense. When the demand was lower, we continued to have a strategic partnership with defense customers. And of course, we can benefit of that relationship now in a situation like this, when our defense, important defense industry is growing a lot. And what is the major challenge that our defense customer face? It's to increase capacity and to handle the rapid technological development. It happens a lot in the defense industry. And what are we supplying to our customers? We support these customers with actually their major challenges. We are helping them to increase production capacity. to invest in new equipment, in test systems, in increased production machinery, etc. in order to increase capacity for the increased demand that they see in the market. And we also have a very strong delivery to these customers within R&D. The technological expertise that Prevaz has within vision systems, embedded systems, software, etc. is a very good fit and supports these customers in their journey as well. We will continue to prioritize defense also in 2036. One thing you might wonder is where are the reference cases? The thing is that I can't actually tell you more in detail what we do for this company, because these customers, they have extremely high safety demands and regulatory demands for what they do. And so we can't tell in detail what we do for these customers. Then a few reference cases. What are we actually doing in Prevas? Now I talked a lot about figures, about EBIT, but the thing is Prevas is actually about what we perform, the value we deliver to our customers. One customer is Foothills. It's a company working with pea production. You know peas, yes. We have developed a production system for peas that take care of from sowing to harvest and also to production. This system is actually integrated with SMHI and that means that we are gathering weather data from different databases in order to optimize the fields, to optimize when to sow, when to harvest. So this is a fantastic system we have built together with Food Hills. And this system is also handling the production planning, the order system for sorting, packaging and freezing. So this is an excellent case I would say that Pevas has been working with. Another company we work for is CTC. They're working with heat pumps and we have delivered a test and simulation system for them. We have delivered control and monitoring software, sensors and hardware for data collection in two climate chambers, a power control unit, extensive water circuited with tanks, valves, pumps, heat exchanger, etc. With this system, the customer can actually simulate seasons, temperature, humidity and other environmental parameters to optimize their products. So once again, we use advanced technology to do good things. Björne Borg Steel is another good example where we have built a scalable production control system, a MES system for steel manufacturing. We gather real-time data to support the customer to take the right decisions and improve efficiency in that company as well. Last but not least, We're working with a customer called Haglunds. They are a Swedish-based company developing and delivering professional refrigerators. And we have been working with industrial design of their latest release. And we actually received, together with this Haglund company, a Red Dot Award and also a Grand Award of Design for the design work that Prevas has done for Haglunds. So next time you go into a fancy restaurant, take a glance into the kitchen. When you see the brand Haglunds, you can think Prevas is inside once again. So these were a few reference cases of what we actually do in Prevas. Summary of the fourth quarter of 2025. We managed to increase the EBITDA with 8% versus last year. This is the second quarter in a row when we are increasing the EBITDA compared to last year. So we have actually, so to say, turned the trend and now we are moving in a positive direction for Q3 and Q4. I'm also very pleased to see the development in Finland where we once again increased the EBITDA substantially from last year 0.1 to up to 3.3 million SEK. And also we see a 19% organic growth in Finland. So the team in Finland are now on the right track. It's very, very pleasing for me to see this. We also had a strong growth in defense plus 31% versus Q4 of 2024. So we continue to grow in the defense area. We have a solid financial and market position moving in 2026, which means that we have the financial position to actually look into opportunities like within M&A, for example, which we continue to search for different prospects. And we have a quite a good pipeline as well in that area as well into 2026. So all in all, I would say that we've made a good progress in Q4 for Prevaz. We are on the right track. We're moving in the right direction. But I'm not satisfied because we're not meeting the financial targets of Prevaz. So we have a journey ahead of us, but we are taking the right steps moving forward into 2026. And that was the actual short presentation of the Q4. And now we move into the Q&A session, which I hope that you all join in and have some nice questions as well. So thank you very much for listening to this presentation.

Thank you very much, Magnus and Helena, for that presentation. And yes, let's open up the Q&A section here. If you're calling in and would like to ask a question, you can press star nine to raise your hand and star six to unmute yourself when you get the word. And we have a caller in from ABG. We have Daphina Chehu. Please go ahead. You have the word.

Hi, it's Stefina from ABG. Thank you, Magnus and Helena, for the presentation. I have a few questions. First on cost, could you explain more in detail what actions you've taken and how you think about the cost base going forward?

Regarding cost base, the major cost we have in Priavas is actually personnel. It's the absolute majority of our cost. And what we have done in 2025 is that we have been adapting our workforce related to the actual demands. And the consequence of that is, of course, the reduced cost base. But you should also remember when the market is turning and we are growing, then we will add costs because we will employ more people as well. But that is one thing we have been doing with the costs. But we have also been very cost-conscious during the year as well in order to keep the general costs, so to say, on a low level as well. We have been... We have not taken the same kind of conferences that we have done in the past and reducing costs in all different manners in order to maintain and fight for the decent margins that we have performed.

Okay, thank you for that. And on pricing in Q4, have you seen any change in market behavior or is pricing pressure largely unchanged?

I would say that the situation is rather unchanged because the market has still been quite tough. But overall, we have been able to slowly, slowly increase prices in Prevas, although at a very low rate.

Yes. And lastly, on the fence, which continues to grow and is an exciting segment for you, could you say a few words about Prevas? typical project sizes, contract length and how this segment differs from the rest of business?

Actually, I would say in many different aspects it's quite similar because one part is when we run projects, it could be the customer needs to increase the capacity in a plant. Then we can support them with actual delivery of production equipment. We support them with a project in order to actually deliver physical equipment and solutions for the increasing capacity. So that is one part. It's more product-based. And that can be from quite small, a couple of millions, up to maybe like... 20, 30 million SEK or something like that for one project. So that is one part of the business. Another part of the business is more general consultancy. And in that sense, it's very similar to other parts of Preva as well, where we have time and material consultancy services on site. And in those, you have... The contract length is normally like three months, six months. But generally speaking for the defense industry, the assignments we have are very long. So when you actually get into the defense industry, you normally have a very long assignment. And then also we run development projects from in-house projects for defense. And in those areas, it's a service we deliver. So it's not a product or a machine or equipment, but it's a general engineering services in shape as a project. And those can be quite big as well in terms of number of hours. So it can be like 5,000 or 10,000 hours. So quite many millions actually in those projects as well. So we actually have many different ways of delivering to the defense industry.

Perfect. That was all for me. Thank you so much. Thank you.

And now let's move on to the written questions that we have received. Start with the first one. How do you view future growth and potential acquisitions?

The strategy of Prevas is to grow with profits. The profitability is our main priority. But of course, we need to grow. We want to grow the company as well. And we see in the strategy, we have organic growth, but also the growth through acquisitions. And we work actively with acquisitions as well. And we have a pipe of M&A candidates all the time, because it's quite long processes as well to build this pipe of interested candidates for M&As. We work actively with M&A in Piavas right now as well. Yes.

Thank you for that answer. We'll move on to the next question here. Your proposed dividend exceeds your previously communicated dividend policy. What's the reasoning behind this?

Yes, actually, the board is proposing 73% of the net profit of 2025. It's correct. It's above the financial targets. We have a 40 to 60%. And the rationale for this is that we have a solid financial platform. We have a solid balance sheet. We have very good cash converts and very strong cash flow in Prevas. And also the board has a very high confidence in our ability over time to generate profit and growth in the future.

Thank you. And we'll take one final question here before wrapping up. What are your priorities moving forward?

Our priority is to work on the profitability of the company. I'm not satisfied with the profit levels we have right now. So our top priority is to increase profit in the company. When we are reaching more healthy EBITDA margins, of course, we will aim for growth as well.

And that concludes this Q&A. Thank you very much, Magnus and Helena, for presenting with us here today. And I wish you all great rest of the day. Thank you very much.

Thank you. Thank you. Bye-bye.